UOB reports 25% increase in Q4 net profit
By Linette Lim |
Posted: 27 February 2013 2221 hrs
SINGAPORE: United Overseas Bank (UOB), Southeast Asia’s third-largest lender by assets, said its overseas profit growth has outpaced that of Singapore’s.
It reported a 25 per cent increase in the fourth quarter (ended December 2012) net profit to S$696 million.
Amid narrower lending margins and moderating loan growth at home, UOB has set its sights on increasing profit contribution from its overseas markets.
For example, it aims to increase wholesale profit contribution from its overseas markets to 50 per cent in 2015, up from 36 per cent currently.
One way is to tap rising intra-regional business flows.
Wee Ee Cheong, group deputy chairman and CEO of UOB, said: “We have seen good growth in cross-border deals especially in the last two years. For example, look at the Thai Beverage-FN deal – a Thai customer coming into Singapore. We are the sole lead advisor and co-lender. This is how we demonstrate the capability. We are able to bring a Thai customer into Singapore and that will be vice versa.”
Mr Wee added that the bank will look to capture a slice of ASEAN affluence, by growing its wealth management franchise.
UOB is the last of the three Singapore banks to report full year results. The full year net profit grew by 21 per cent to S$2.8 billion.
Earlier, DBS reported core net profit of S$3.4 billion, while OCBC recorded net earnings of S$2.8 billion.
Mr Wee said: “Our home market is maturing, and we will see slower growth in the long term. That makes our Southeast Asian strategy and network even more crucial. While Singapore remains our key pillar, our future is in the region.”
While regionalisation may be a key strategy for the Singapore banks, analysts say there could be challenges.
DBS is bidding to buy Bank Danamon in Indonesia and has been awaiting regulatory clearance since last April.
Jonathan Koh, associate director at UOB Kay Hian Research, said: “As we move closer to the year 2014, it may be harder to get the deal completed because in 2014, Indonesia is going to have their elections. So hopefully the deal gets completed this year. If it drags on for too long, then the political voices may overshadow the commercial basis of this deal.”
According to reports, OCBC is eyeing a multi-finance company in Indonesia and has put in a bid for a bank in Thailand.
- CNA/xq
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UOB reports 25% increase in Q4 net profit
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